Apple
last upgraded its popular all-in-one iMac desktop computers back
in early May. The refresh brought new Core i5 and Core i7 quad-core
processors along with Thunderbolt connectivity for both the entry-level
21.5" and higher-end 27" models.

The
starting price for the 21.5" iMac is $1,199 and it gets you a 2.5GHz Core
i5 processor, 4GB of memory, a 500GB hard drive, and an AMD Radeon HD 6750M GPU
with 512MB of memory. A student discount drops the price down to $1,149.

Now,
Apple is looking to further move into the education sector with an even cheaper
iMac priced
at $999 according to Mac Rumors.
Unfortunately, the $150 price cut means that this iMac comes with some serious
shortcomings.

The education-only
model comes with a dual-core, 3.1GHz Core i3 processor, a measly 2GB of RAM,
and a 250GB hard drive. The AMD Radeon HD 6750M GPU also has its onboard memory
cut in half compared to the "standard" iMac. It also loses out on the
Thunderbolt port included on all 2011-spec iMacs. All other features remain
including the 1920x1080 display, FaceTime HD camera, and SDXC memory slot.

You can get a case/mobo/power supply barebones kit and easily shave $50 off of that.

Also you have a dedicated graphics card in your price breakdown, but Apple is only providing an integrated graphics with shared memory. Subtract $120 for the video card and add $50 to the motherboard for one with integrated video.

That brings you down below $600. Once you factor bulk pricing into the mix you are closer to $500. And now Apple is getting their usual 100% profit margin.

You and cochy are too hung up over accuracy. I was making a point: even if Apple paid RETAIL costs for putting together an iMac it would still make a profit. $200-$300 in profit from a unit cost of $1,000 is pretty damn good considering the slim margins on electronics. Apple is making much more than that, probably the $400-$500 you estimate, and that's for EDUCATIONAL sales, which are more heavily discounted than even volume contracts.

People want to know why Apple is profitable? Take the same guy's stuff, wrap it in aluminum, put a cool logo on the back that lights up, and charge 200% as the next guy.

Reminds me of a story my dad told me. Back in the 70's he saw kit PCs for sale. One sold for twice as much as the next unit, so my dad checked it out, along with the other customers, many of whom purchased the expensive unit. My dad couldn't find much of a difference, they seemed to perform the same. Finally, he pulls the sales guy aside and asks. The sales guy replies "they are the same, it's just one has a blinking LED, so people think it's doing more and faster." Consumers...

apple has $70+ billions dollars & more cash then the USA gov't. they can afford to give some iMac to donate education market. even Facebook founder/CEO that dont know how much he or his company are worth donated money to help New Jersey school district.

apple with steve jobs is a "control freak" & now "greedy." when microsoft had $40+ billion dollars in early 2000s, they have less now by starting dividend to return value to shareholders, & even bill gates donate his money to charity.

quote: and that's for EDUCATIONAL sales, which are more heavily discounted than even volume contracts.

Actually, Apple has cut back on the Educational Discount, giving something like a $20 to $50 per unit discount. It's a lot less than it was in previous years. Hardly enough for a teacher, professor or instructor to choose it over a PC for their own use.

True and I can tell you for a fact that Win7 pro is roughly $50 for educational and Office is also roughly $50. So for roughly $100, you get a full functioning OS and productivity suite v you pay $30 for the OSX and about $120 for Office for Mac.

If you REALLY want to save money you could get OpenOffice for the Mac (which I am unsure if there is a version for Macs) so then you save about $70, which in the long term is rather insignificant.

Another interesting licensing cost for educational environments is Windows Server. Server 2008 R2 standard is about $700 for an OEM copy but educational clients get it for about $100.

microsoft right now still has a deal for back to school where you can give windows 7 pro upgrade for $29.99. it is a digital download & if want a disc cost $15 extra. also can get office 2010 pro for $99.95 & again digital download. the only require is a student email ending it (.edu) or (.org) & have schedule to prove if not on the list.

I work in a largish school system. We have the software assurance agreement with MS and our employees can purchase Office Professional Plus or Office for Mac for $9.95 through their Home Use Program. $500 program for $10, hell of a deal indeed. Wish they offered Win 7 through the program.

Well, realistically, MS makes more money on CALs than they do on the base server license. I'm not sure what they charge schools for on CALs...That's always the biggest killer. 30 bucks per user racks up the bills pretty quick.